China jobs market still seen as weak, unstable even as unemployment rate returns to pre-coronavirus level

22-Jan-2021 Intellasia | South China Morning Post | 6:02 AM Print This Post

While China’s unemployment picture, like the overall economy, on paper has all but recovered from the impact of the coronavirus, the reality on the ground suggests the job market still remains weak and unstable.

As China reported its economy grew by 2.3 per last year and by 6.5 per cent in the fourth quarter from a year earlier, the often criticised official surveyed unemployment rate came in at 5.2 per cent in December. This was the same as at the end of 2019 and a far cry from February’s reading of 6.2 per cent.

“As someone who has been unemployed for half of a year, I gave a silent thumbs-up to the report. The reality is more like you cannot find jobs even though everything looks so good,” said a popular comment on Weibo, China’s answer to Twitter.

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The recovery is seen to be largely due to turnarounds in industrial production, infrastructure and property investment and some parts of the service sector after tens of millions of migrant workers from rural areas who used to travel to urban cities for work were forced to stay at home and lost their incomes at the height of the pandemic in China at the start of last year.

The overall situation looks better year after year, but why do I feel it is harder to live year after year?

Weibo comment

“Industrial production has helped drag up manufacturing profits, employment and investment, which would otherwise struggle amid the sluggish Chinese consumer recovery,” said Rory Green, China economist at TS Lombard.

By the end of 2020, the number of migrant workers had recovered to around 97 per cent of levels seen in 2019, while the ratio of them being unemployed stayed almost the same as a year earlier, according to China’s National Bureau of Statistics.

“The overall situation looks better year after year, but why do I feel it is harder to live year after year?” said another comment on Weibo.

The situation involving Beijing’s biggest worry in the labour market fresh graduates from universities and colleges also seemed to have eased last year, according to official data. In December, the unemployment rate among people aged 20 to 24 with a higher education fell by 7.2 percentage points from July to the same level as in 2019.

But an index that measures changes in job supply and demand showed that the overall jobs market in the last quarter of 2020 was still weaker than a year earlier.

According to the China Institute for Employment Research at the Renmin University of China, who developed its index based on data from Zhaopin, a Chinese portal for job posts, the number of job offers fell by 17 per cent and the number of jobseekers dropped by 7 per cent.

The amount of jobs available for graduates was 2.26 times the number of applicants in the fourth quarter, a higher ratio than at the same time last year. But because the number of applicants fell more than the supply of jobs, this did not necessarily represent a turnaround.

Foreign invested companies in China, including joint ventures, have become the most cautious employers, with new positions falling by double digits in every quarter in 2020, according to the index.

At the same time, jobs from state-owned enterprises were the most competitive as more people sought job stability. The number of graduates applying for jobs at state-owned enterprises last year rose 42 per cent compared to 2019, in spite of an 18 per cent drop in job offers, the index said.

Among jobs offered to fresh graduates in 2020, only those from private firms increased by 5 per cent from a year earlier, while other types of companies all reduced their hiring budgets, with joint ventures cutting more than half of positions for recruitment compared to 2019.

The country’s north east rust belt remains the weakest job market, with the number of positions far fewer than applicants.

The three north eastern provinces of Heilongjiang, Jilin, and Liaoning have all endured large outflows of young talent in recent years due to weak economic growth.

China set a target of creating 9 million new urban jobs in 2020, compared with 11 million in 2019. This week, it confirmed that there were 11.86 million new urban jobs created in China last year, 131.8 per cent of the target. For the whole of 2020, China’s surveyed jobless rate was 5.6 per cent compared with a target of around 6 per cent.

“The government reported that new urban job creation reached 11.9 million in 2020, though the number of migrant workers declined by over 5 million. Migrant wages rose by 2.8 per cent in 2020 on average, compared to 6.5 per cent in 2019. These numbers suggest both improving labour market conditions and room for further improvement,” said Wang Tao, chief China economist at UBS Investment Bank.

https://sg.news.yahoo.com/china-jobs-market-still-seen-105049877.html

 

Category: China

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